Microsoft/Yahoo: Talks Not Current, Deal Would Face Obstacles -- WSJ

In response to Friday's New York Post article that Microsoft and Yahoo! were seriously considering a merger, the Wall Street Journal reported Sunday that while the companies did discuss a possible merger or other matchup "that would pair their respective strengths" a year ago, the discussions are not currently active. The companies, it says, may yet pursue "some other form of cooperation." People familiar with the situation say Microsoft's online unit is headed for a 'shake-up' after it has failed to gain search market share against rival Google. They say CEO Steve Ballmer's frustration with the unit is "palpable." One possibility, the Journal says, is a Microsoft/Yahoo team where Microsoft runs the technical end of things while Yahoo! staff oversees the consumer-oriented/content side. Microsoft, it says, could possibly spin its online unit into Yahoo in return for a Yahoo stake. But with Yahoo's recent signs of increasing momentum, it is likely top staff would resist any substantial form of combination.

Sources: Wall Street Journal
Commentary: Microsoft, Yahoo: It Will Take More Than a Merger to Compete With Google • Microsoft-Yahoo! Merger Wouldn't Vanquish Google • No Way Is Microsoft Going to Buy Yahoo For $50B • Microsoft/Yahoo: The Numbers Just Don't Add Up • Microsoft/Yahoo: Merger Out, Alliance In?
Stocks/ETFs to watch: Microsoft Corp. (MSFT), Yahoo! Inc. (YHOO), Google Inc. (GOOG). ETFs: Internet HOLDRs (HHH), First Trust Dow Jones Internet Index (FDN)

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Comments

[Tom B:]

Would our FTC briefly awaken from its slumber, I wonder, to kill this beast? Probably not, but you never know.

2007 May 07 08:59 AM

[oceandude:]

Why would they? Google is more than enough competition. There's also the smaller players still around like ask.com.

2007 May 07 12:14 PM